"Buy on rumor, sell on news". This theme or trading strategy (not an investment advice) is always there every year and especially a recurring theme for the banking sector due to continued push by the regulator to consolidate the players. 2017-18 were BDMN, BTPN, 2019 was BNLI, 2020 was BRIS, 2021 was BANK, BBHI, BNBA and this year the hot topic is on PNBN in 2022. The quest for corporate action for PNBN has been in the market for the past 7 years as traders continue to speculate if there will be divestment or outright sales of Panin Bank. We do not know. But, market seems to be very convinced this year, even more so than previous years in 2015/2017/2019 when the rumor appeared. You can see this clearly in the share price (which shows what the market expects) at all time high for PNBN and the other Panin Group (PNLF, PNIN).

Now let's entertain the rumor, assuming that this is the case, who are the bidders? MUFG and SMBC seem to be the contestants. The next question is why these two banks? It's simple, its all margins. Japanese banks don't make much margins in Japan with negative yielding interest rates, but they do make money in Indonesia where NIM is 6-7% on average. Historically, they can borrow cheaply in Yen (though now Yen has imploded, a 20-30% decrease against major peers, even against IDR) and finance expansion abroad with Indonesian banking sector looking very attractive comparatively to other EMs in South East Asia. They have already done so by buying BDMN and BTPN, respectively.